How profitable were your hotels last month?
June: +170bps of GOP margin growth on approx. +4.5% Total RevPAR. 2Q ~ +100bps
What's Incremental To Our View
In our monthly analysis of operational level P&L metrics of nearly a thousand U.S. upper-tier full service hotels (data source: HotStats), we continue to forecast slightly positive margins for the full-year 2018 - this is being driven by modestly stronger transient demand above prior expectations.
June, a month that benefited on the Group side from the July 4th shift, had the second-strongest RevPAR performance since March 2017 with 4.4% Rooms RevPAR growth driving GOP margins of +170 bps. Subsequently we forecast US full-service hotel GOP margins came in at approx. +100 bps for 2Q18 which is approx. 25-50 bps higher than we would have thought at the start of the quarter. We continue to observe rising labor costs in 2018. However, recent trends suggest that efforts by hotel owners to minimize labor cost growth have had some positive effects.